Sunday, September 16, 2007

In Part 1 we discussed some background on "framing" and the importance of how you present an offer. So now we are going to apply that to presenting a Theory of Constraints (TOC) Mafia Offer.

During a Mafia Offer Boot Camp we create either a PowerPoint presentation (called a Solutions for Sales presentation) with your offer and/or what we call a 1 Pager. In both cases we follow the same framing.

Agree on the problem.

Agree on the direction of the solution.

Agree that our solution solves the problem.

The above is part of the Theory of Constraints buy-in process. Notice the resemblance to what was presented in Part 1 regarding Ludwig von Mises' three requirements for an individual to change:

The individual must be dissatisfied with the current state of affairs.

They must see a better state.

They must believe that they can reach that better state.

Let's look at each step in some detail.

1. Agreeing on the Problem.

In the PowerPoint presentation we start with "Analysis of the Supplier's Practices". In this part of the presentation we show how suppliers in our industry (us and our competitors) have a negative impact on our customer's business. These negative effects are due to our practices. Typically these practices are common across our industry and include minimum order requirements, scheduling practices, lead-times, and so on. In this way we are starting with how OUR practices are the cause for at least some of their problems.

Here's an example:Supplier Practice: Minimum Order Quantities and Volume DiscountsCustomer's Mode of Behavior: Batch orders (delay ordering) to accumulate needs and order larger quantities than immediate needs require to get the discount.Implications on Customer's Business: High inventory with all the cost and risk that goes with it.

Here's another:Supplier Practice: Charge based on time or by project.Customer's Mode of Behavior: Slow decision process (check references, etc.) to be sure that promised benefits will be actualized.Implications on Customer's Business: Promised benefits are not always realized or if they are, they were delayed.

When you do the typical sales call -- show up and throw up spouting all the features and benefits of your product or service, the customer is automatically resisting and looking for reasons not to buy. By starting with how WE negatively impact them, customers are more open to hear what we have to say next.

I typically like to generate discussion around these problems because often times there are people in the room that were not aware of the situation or the magnitude of the problem.

In the 1 Pager we start similarly but we have an opening sentence or two to explain the problem(s). We would start with something like:

Widget suppliers typically require their customers to order minimum quantities and give further incentives to place even bigger orders because that's what's best for them. Have you followed the rules? Have a small mountain of inventory? But still stock out? Is doing what's best for us, not as good for you?